PJM’s proposal to exempt transmission upgrades under $20 million from a $30,000 study fee is unduly discriminatory, the Federal Energy Regulatory Commission ruled Friday.

While the ruling (ER15-639) would seem to be a victory for non-incumbent developers, two non-incumbents, LS Power and ITC Holdings, had asked FERC to approve the PJM filing, the result of a compromise Members Committee vote in November. (See PJM Independent Transmission Cos. Win Concession on Project Evaluation Fees.)

LS Power proposed the compromise after an earlier proposal, which would have charged only new “greenfield” transmission facilities, fell short of a two-thirds majority. The proposed compromise would have assessed the fee on upgrades of $20 million or more as well as all greenfield transmission proposals.

LS Power and other non-incumbent transmission developers had contended the original proposal was unfair because it applied to greenfield projects only.

PJM officials said that upgrades by transmission owners typically did not require the intensive engineering analysis that the fee is intended to pay for.

The Members Committee approved LS Power’s compromise with an 84% sector-weighted vote.

But the commission ruled that PJM failed to show that the costs of studying transmission owner upgrade proposals with estimated costs under $20 million would be different than the costs of studying greenfield projects with similar costs.

“Even though PJM’s proposal represents a compromise among stakeholders, PJM’s proposal is inconsistent with the requirements of Order No. 1000,” the commission said.